BILL NUMBER: SB 1731	CHAPTERED  07/21/00

	CHAPTER   175
	FILED WITH SECRETARY OF STATE   JULY 21, 2000
	APPROVED BY GOVERNOR   JULY 21, 2000
	PASSED THE ASSEMBLY   JULY 6, 2000
	PASSED THE SENATE   MAY 16, 2000
	AMENDED IN SENATE   MAY 9, 2000
	AMENDED IN SENATE   MAY 1, 2000

INTRODUCED BY   Senator Lewis

                        FEBRUARY 23, 2000

   An act to add Sections 11621.1, 11621.2, 11621.3, 11621.4, and
11621.5 of, and to repeal Section 11621 of, the Insurance Code,
relating to insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1731, Lewis.  Insurance.
   Existing law creates the California Assigned Risk Plan, which
requires the assignment to insurance companies transacting liability
insurance of automobile insurance risks for applicants who are
entitled to, but are unable to procure that insurance through
ordinary methods.  Existing law exempts certain insurers from these
assignments.
   This bill would repeal these insurer exemption provisions.  This
bill would enact provisions governing an insurer's responsibilities
with respect to the plan in situations involving an insurer that
discontinues writing automobile liability insurance in this state but
that retains its license to write that business, and in situations
involving an insurer that is no longer licensed to write that
business.  This bill would also allow new plan assignments to a
participating insurer to be suspended and would allow a participating
insurer to be relieved of its obligations to renew existing assigned
risk policies under certain conditions.  This bill would also enact
provisions governing insolvent insurers, and make other related
changes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 11621 of the Insurance Code is repealed.
  SEC. 2.  Section 11621.1 is added to the Insurance Code, to read:
   11621.1.  ln the event an insurer discontinues writing automobile
liability insurance in this state but retains its license to write
that business, it shall continue to pay plan assessments and receive
plan assignments until its quota or quotas established by its
writings prior to discontinuance of business has or have been filled.
  However, if the automobile liability business of an insurer
discontinuing the writing of that business in this state has been
transferred to or reinsured by another insurer, the latter shall
receive and assume the plan assignments and plan assessments of the
insurer discontinuing business, as established by its writings prior
to the transfer or agreement of reinsurance, until its quota or
quotas has or have been filled, unless another insurer is allowed to
assume those obligations.
  SEC. 3.  Section 11621.2 is added to the Insurance Code, to read:
   11621.2.  (a) An insurer that is no longer licensed to write
automobile liability insurance in this state shall have its plan
business treated in the same manner as its voluntary business and
shall not receive new assignments.
   (b) The run-off of existing plan business shall be conducted in an
orderly manner with policies nonrenewed upon the next anniversary
date.
   (c) An insurer that elects to surrender its license or has its
license to do business in this state revoked shall comply with the
following requirements:
   (1) If an insurer elects to leave this state by surrendering its
license to write automobile insurance, it must submit to the plan's
advisory committee as a condition precedent to the surrender of its
license a plan that disposes of the insurer's quota of plan
assignments established by its voluntary writings, and provides for
the handling of its outstanding assigned risk policies, including
payment of claims, by appropriate financial arrangements or
reinsurance agreements.  The plan's advisory committee shall evaluate
the plan that is submitted and shall advise the commissioner as to
whether or not it recommends acceptance or rejection by the
commissioner of the plan.
   (2) In the event an insurer's license to do business in this state
is revoked by the commissioner, the insurer shall submit to the plan'
s advisory committee a plan that disposes of the insurer's quota of
plan assignments established by its voluntary writings, and provides
for the handling of its outstanding assigned risk policies, including
payment of claims, by appropriate financial arrangements or
reinsurance agreements.  The plan's advisory committee shall evaluate
the plan that is submitted and shall advise the commissioner as to
whether or not it recommends acceptance or rejection by the
commissioner of the plan.
   (d) If all insurers in a group are under the same ownership and
management, or a group elects to be treated as a single insurer and
an insurer in the same group is no longer licensed, that insurer
shall comply with the provisions of this section.
  SEC. 4.  Section 11621.3 is added to the Insurance Code, to read:
   11621.3.  Insurer groups under the same ownership may elect to be
treated as one insurer for purposes of participating in the plan and
receiving its assignments and assessments pursuant to this article.
  SEC. 5.  Section 11621.4 is added to the Insurance Code, to read:
   11621.4.  (a) New plan assignments to a participating insurer may
be suspended or a participating insurer may be relieved of its
obligation to renew existing assigned risk policies at expiration
when a valid order of suspension is issued by the commissioner and
the suspension of assignments or policy renewals is approved by the
commissioner.  Prior to the approval of a suspension of assignments
or policy renewals, the plan's advisory committee shall advise the
commissioner as to whether or not it recommends approval or denial of
the suspension.
   (b) If an insurer granted relief pursuant to subdivision (a)
resumes writing business in this state, its quota shall reflect the
plan assignments it would have received and the assigned risk renewal
policies it would have issued during its period of suspension.  The
required assignment adjustment shall be spread over a period of three
or more years, as determined by the commissioner.  Prior to
determining this assignment adjustment, the plan's advisory committee
shall advise the commissioner as to whether or not it recommends
approval or denial of the adjustment.
   (c) The adjustment of the insurer's quota shall be a percentage of
the insurer's under-assignments as determined by the commissioner.
Prior to determining this adjustment, the plans's advisory committee
shall advise the commissioner as to whether or not it recommends
approval or denial of the adjustment.  After the approved period of
adjustment has expired, the insurer's normal quota will resume unless
the insurer shows good cause to and receives approval from the
commissioner for extension of the adjustment period.  Prior to this
approval, the plan's advisory committee shall advise the commissioner
as to whether or not it recommends approval or denial of this
extension.
  SEC. 6.  Section 11621.5 is added to the Insurance Code, to read:
   11621.5.  (a) In the event proceedings have been initiated by the
commissioner to have an insurer declared insolvent, and a receiver or
liquidator has been appointed, the plan shall reimburse any insured
of that insurer for the unearned premium on any assigned risk policy
then in force, upon submission of satisfactory evidence from the
insured that the policy was in force at the time of the declaration
of insolvency and that the requisite premium had been paid.
   (b) The amount expended by the plan to remit unearned premium to
insureds shall be deemed a cost of administration of the plan and
shall be apportioned as provided in the plan adopted and approved
pursuant to this article.  The plan shall be subrogated in the
liquidation proceedings to the right of reimbursement of all insureds
to whom unearned premium has been remitted.  In the event that the
insurer is subsequently found by the court not to be insolvent, the
proceedings are dismissed, and the receiver or liquidator has been
discharged, the insurer shall be assessed by the plan for the total
amount expended by the plan for return of unearned premiums.
